How To Invest in Bitcoin in 2018: Easy to Follow Guide for Beginners

The Best Bitcoin Exchanges of 2018 (and Worst)

Selecting a bitcoin exchange can be a tricky thing because lots of the best sites to buy bitcoin haven’t been around long enough to garner much word of mouth. Some of the best bitcoin exchanges have only opened in the last few years and, as such, they haven’t had time to earn much buzz.

If you’ve come to this page, you’re likely looking to find the most secure option for investing in bitcoins. Perhaps you’ve tried to do some research on the subject and hit a bunch of dead ends.

Well, fear not, my fellow enthusiasts. I’ve got your covered!

In the following list, I will tell you all about the very best bitcoin exchanges I’ve come across. Each exchange has been carefully vetted and tested to ensure that they meet the most vigorous of standards. I’ve reviewed them based on several factors including reputation, transparency, customer support and payment methods.

The number one thing you need to look for out of a bitcoin exchange is the safety of both their website and their server. Like I said above, transparency is the name of the game. You want to feel confident that you are doing business with a trustworthy service that deliver transparent information about the coins in cold storage.

For those who haven’t yet familiarized themselves with the lingo of cryptocurrencies, “cold storage” refers to a method of securely storing data (in this case, bitcoins) that won’t be accessed very often. Cold storage is an offline means of storing your digital currency.

Cold storage is the ideal method by which to bank your bitcoins because it makes your coins less susceptible to attacks by hackers. In other words, there is no internet access involved so no one can get to it without your permission.

The second thing you want to know about a bitcoin exchange is whether or not their customers are satisfied with their service. The smartest way of going about this is to look at bitcoin-related forums and visit some relevant sub-Reddits. There, you’ll be able to see what people are saying about a particular bitcoin exchange, what their experiences have been using such exchanges.

This is also a good way to weed out the bad puppies because users frequently post warnings about certain shady bitcoin exchanges. Oftentimes, they’ll detail the areas in which a given bitcoin exchange failed to live up to their reputation or mission statement.

The greatest bitcoin exchanges are secure and well-regarded. You can usually tell the good from the bad and the good from the greatest by their user ratings. As with just about anything else, if their average rating is poor, they’re not a company that’s worth your time or monetary investment.

I started this page after going through the headache of researching how to trade bitcoin. It occurred to me that there weren’t enough detailed, honest reviews out there and that, maybe, I could help my fellow investors out by pointing them in the right direction.

With that in mind, here’s my comprehensive list of bitcoin exchanges, both good and bad. I trust you’ll find that it’s much easier to determine which bitcoin exchanges to go with after reading the following.

Pick # 1—eToro

With more than five million users in more than 170 countries, it’s clear to see why eToro is numero uno in my book. The numbers speak for themselves. Etoro is one of the most trusted trading and investment platforms on the market.

Etoro was founded in 2006 by two brothers who wanted to create a brokerage that would be user-friendly for both the beginner and the high roller. Their aim was to provide a platform that could be suitable for anyone and easy to comprehend.

Since its inception, it has grown rapidly and accommodated all sorts of investors including those who don’t have a lot of money to throw around. They’re dedicated to each of their customers’ needs and give those customers up-to-the-minute reports on their investments.

Their educational program is exceptional in its own right, but the advanced features don’t stop there. They also point you in the right direction with their handy eToro practice account which enables the prospective customer to test out their trading platform before buying in.

The folks at eToro never charge commissions on trades and are always available to answer any questions or concerns. And depending on where you are in the world, the minimum deposit could be as low as $50.

Pros

Seamless social trading integration

Excellent customer support

Variety of markets

Variety of payment methods

Low minimum deposits

Free demo

Mobile device compatibility

24/7 live chat

Cons

High fees

Minimum anonymity

Just two crypto-markets (BTC, ETH)

No cryptocurrency deposits

Pick # 2—Gemini Exchange

This US-based firm was founded by the Winklevoss twins. Yeah, those Winklevoss twins. As multi-millionaire venture capitalists, the Winklevosses have designed an exchange where you never have to worry about deposit or withdrawal fees and where you can beef up your bitcoin portfolio by combining it with an investment in Ethereum.

Gemini levies a flat rate of 0.25% for trades to buyers and sellers alike, thereby leveling the playing field for all involved. They also reside in New York where their close proximity to the Wall St financial markets makes it possible for them to bridge the gap between cryptocurrencies and more traditional methods of investment.

Yet another way that Gemini differentiate themselves from other exchanges is in their acceptance of ACH transfers for faster access to funds for trades. The only drawback to this one is the lack of an ergonomic interface, but after a little trial and error, most investors will find that buying and trading with Gemini makes for a positive experience.

Pros

Far cheaper than most

Solid reputation among investors

Close proximity to Wall Street

Reliable transfers

High level of security

Exceptional uptime and speed of service

Cons

Little interest in transaction-related activity

Only offers Bitcoin or Ethereum

Pick # 3—Bittrex

Since their inception in 2014, Bittrex has proven themselves to be one of the most trusted and secure exchanges available. They are committed to delivering a fast, simple and dependable service. With Bittrex, you’ll be able to sleep soundly instead of being glued to your computer screen at all hours of the night. That’s because they are dedicated to protecting your money instead of losing it to hacks or collapse.

Hailing from Las Vegas, Nevada, a town notorious for its high stakes casino experience, you might think Bittrex is the house and the house always wins, but that’s not the case here. Investing with this exchange is no more of a gamble than investing with any of the other top bitcoin exchanges.

On the contrary, the company complies with US monies laws, maintains an easy setup and structure, and pride themselves on catering to their clients at every step of the investing or trading process.

Signing up is a piece of cake; you just give them your name, email address, date of birth and phone number and you’re off to the races. You can begin trading straight away with one of their basic verified accounts.

They also offer higher-tier facilities for the more advanced investor who wants to make deposits and withdrawals with transfers in excess of $10,000 or more.

Whereas some exchanges are limited when it comes to the altcoins they offer, Bittrex gives their clients access to more than 250 altcoins including Ethereum, BitCNY and USD-Tether.

Pros

Almost 200 trading pairs

Fast signup

Terrific platform for arbitrage

Offers 1-minute charts

Superior support and security

Interruption of service is seldom

Trusted by millions of traders

The most visited altcoin exchange

Large volumes available for big trades

Cons

Cumbersome vetting requirements, particularly on non-fiat exchange

Moderate scaling issues during an influx of user signups.

No margin trading

No reductions to trading fees

Pick # 4—Changelly

Like Bittrex, Changelly supports a wide range of digital currencies including Bytecoin, Dash, DigitalNote and Monero. Users have reported receiving earnings in under an hour which makes Changelly one of the fastest and most reliable exchanges one can use.

Although they are fairly new to the industry (they were founded in 2013), Changelly has gone out of its way to solidify a solid reputation among their customers. They offer 35 different currencies and two-factor verification for optimal security.

Changelly is different from other services in that it functions as a robot that integrates into large cryptocurrency trading platforms like Bittrex (see: above) and Poloniex. The robot makes bids and asks on these platforms, selecting and suggesting the best available rate and displaying the estimated rate on the Changelly site.

On the downside, Changelly’s rates are often higher than anticipated at the end of a transaction. Other than that, they are a viable option for those looking to purchase bitcoins from a trusted and tested source.

Pick # 5—Coinbase

The world’s largest Bitcoin broker, Coinbase is available in multiple countries and also serves as a web wallet. With $6.5 billion worth of exchanges and approximately four million customers, they have become one of the most talked-about exchanges on the market.

The intuitive design of their site and instant purchases are but two of the features that have attracted their sizable user base. Bitcoin deposits are insured and backed by Coinbase’s partnership with a number of banks.

Pros

Easy to use

Credit and debit support

Instant purchases

API for developers

Insured deposits

Rock solid verification for ultimate security

Variety of wallets

Multsig vault

Cons

Poor customer support

Monitoring customer spending habits

Reputation for withholding affiliate earnings due to “technical difficulty”

Pick # 6—Localbitcoins.com

One of the most private ways to purchase bitcoins, Localbitcoins.com is a P2P exchange. This puts the power in the hands of the customer because the buyers and sellers determine their own trade terms and use the site simply for escrow.

Another pro here is the widespread availability. Localbitcoins.com is accessible in nearly every country with the exception of Germany and the State of New York.

The thing that appeals to most investors about Locabitcoins.com is the fact that, whereas other exchanges expect a fair amount of data to verify an account, they do not ask for any of your personal information when you’re making trades.

As if that’s not enough, they accept ANY payment method. Just be sure that you don’t use any reversible payment methods.

Pros

No verification needed

Popular in most countries

Wide range of payment methods

Good privacy

Buys made with cash deposit deliver bitcoins within 1 hour on average

In-person cash trades are fast and easy to organize

Long-established exchange with a solid reputation

Flat fee of one percent on trades

Good customer support

Cons

Inflation can become an issue

Speed of delivery can take time

ID verification required on larger transactions

Fees may be high when purchasing with cash

Pick # 7—Etherdelta

This decentralized trading platform was founded in 2016 and wasted no time in becoming one of the greats in the field. By utilizing the Metamask Chrome browser extension, users are able to maintain total control over their money while watching that money grow.

All funds are contained within smart contracts and the user holds the private keys to those contracts. Their site’s design is a bit threadbare, but many investors prefer the minimalist approach since it eliminates the smoke and mirrors and allows them to focus on their transactions with ease.

Pros

Funds are safe on this fully-decentralized exchange

No ID, actual name or registration required

Preferred by scores of users

Cons

More difficult to use than other exchanges

Transaction lags

Unreliable wallet

Poor customer support

Pick # 8—BitPanda

BitPanda is an Australia-based broker that has a reputation as being the most secure crypto exchange in Europe. They are renowned for their quick transaction process and dedicated customer support staff.

Accepting a number of unique payment methods, such as GIROPAY/EPS, NETELLER, OBT, SEPA Transfer, Skrill, SOFORT Transfer and Visa/Mastercard Debit or Credit, BitPanda is an excellent option for those living outside of the US (Americans do not have access to BitPanda).

BitPanda has been around since 2014 and show no signs of going away any time soon. In fact, they parlayed their startup award in 2016 into a rep that’s relatively unbeatable. Investors know their name and clients swear by it.

What really knocks me out about BitPanda is that they permit chargebacks on credit cards, Skrill and so forth. That’s to say nothing of the sleek, sexy design of their interface as well as the dependability of their customer service team. If you live in the EU, this is the way to go.

Pros

Decent fees

Wide range of payment options

Beginner-friendly

Easy to use

Good customer support

Strong reputation

Cons

Reports of them stealing clients’ funds

Problems with payment processing and communication

Transaction delays

Accounts terminated without warning

Pick # 9—Bitmex.com

One of the leading bitcoin margin trading sites, Bitmex.com has a daily trading volume of more than 35000 BTC. Users are able to create an entirely anonymous account and easily navigate their detailed pages.

Bitmex provides useful charts that help you to follow the market and your position within it. Users are able to tailor their widgets to personal preference and set a trailing value for placing a market order.

While many people use Bitmex for margin trading, this is not advisable for the beginner as it involves a fair amount of leverage. Also, their graphs can be perplexing to the novice investor.

Pros

High volume

Large package of order types

Major altcoins are tradeable

Excellent security

Total anonymity

Cons

Restricted for US traders

Not a platform for beginners

Pick # 10—GDAX.com

GDAX.com is the exchange for the more technically-proficient trader who knows the ins and outs of the market. GDAX offers optimal liquidity and lightning fast withdrawals. For those looking to buy and trade Ethereum, GDAX.com is the best of the best.

A San Francisco-based offshoot of Coinbase, GDAX has gained significant word of mouth thanks to their level of security. When a rash of cyber attacks affected numerous bitcoin exchanges, GDAX and Coinbase were completely unscathed.

Users like GDAX because their fees are low, the returns are substantial and the team is committed to their clients. Whether it’s leverage or deposits, customers have been more than satisfied with their experience with this house.

On the other hand, they only offer three trading instruments (Bitcoin, Ethereum and Litecoin, respectively), but that should hardly matter to the person who’s looking to buy bitcoins and bitcoins only.

Pros

Competitive fee structure

Great security

New York BitLicense

Relatively good platform

Accepts bank transfers

No major hacks as of right now

Cons

Limited number of altcoins available

Suspicion of manipulating prices

Exchanges to Avoid

There are plenty of shady outfits out there that would like to take your money and run. They pop up all the time and some of them manage to get away with it while maintaining a presence in the industry. In the interest of keeping my readers safe, I’m calling them out right here, right now.

Bitcoin Platinum

Investors have been furious about this supposed scam that was allegedly created by a South Korean teenager as a prank. Bitcoin Platinum advertises itself as a hard fork and it’s caused much controversy. Those in-the-know are already aware of this scam, but everyone should be warned that the mastermind behind Bitcoin Platinum spreads news about the non-existent hard fork to try to decrease the price of bitcoin.

Paxful

There have been innumerable reports of Paxful being a scammer site. Sources say the CEO of the exchange is a criminal who uses cocaine, waves semi-automatic weapons around and rips people off, stealing their accounts out from under them.

Others have complained that Paxful allows traders to scam each other, doing nothing to stop bogus transactions and deals.

Coin Mama

This company should be avoided at all cost. Not because they are necessarily criminal in any way, but they are clearly disorganized as multiple users can attest to.

Several of their clients have signed up and spent a significant amount of money on bitcoins, only to find that said bitcoins were released to someone else’s email address with no chance of them ever recovering it. Definitely a house to avoid.

Security & Privacy

When we talk about security, we’re not just talking about your funds being secured within cold storage. We’re also talking about the sense of security you should have when it comes to your investment.

There is much concern right now about the potential for Bitfinex to crash Bitcoin. This isn’t something that should be ignored as the CEO of Bitfinex is also the CEO of Tether Limited which uses a pegged currency.

The tether’s value is supposed to be equivalent to that of the US dollar, but the tether-to-dollar relationship has been undermined of late for the very same reason that cash money loses its value. If you’ve ever seen pictures of poor children in Zimbabwe pushing wheelbarrows full of millions of Zimbabwean dollars then you know what I’m talking about.

The same problem has occurred with this cryptocurrency. After 50 million tethers were printed in a single week in November of 2017, the currency’s price ballooned fast. This is problematic because it is not likely that the newly minted tethers actually represent 50 million US dollars in today’s economy.

This affects Bitcoin because once these tethers are sent to Bitfinex, Bitcoin experiences a price spike. This means that tethers are used to purchase bitcoin. The risk factor comes into play if these tethers don’t truly represent the value of the US dollar.

The language Bitfinex uses to assuage their customers’ concerns about the currency don’t really put one at ease. Simply saying that they have the “resources” to back the tethers up is not gonna cut it with the discerning investor who wants proof of their financial foothold.

It is always important to understand the volatile nature of Bitcoin before investing. If the Mt. Gox hack taught us anything, it’s that investors can seriously flirt with disaster if they’re not careful about who they do business with. If you aren’t absolutely certain that an exchange is being managed properly, you should skirt disaster by holding out until you find one that meets your needs, and provides you the privacy and security you deserve.

Always be sure to find a bitcoin exchange that allows you to buy bitcoin without verification or ID if possible. Investing anonymously is just one of the ways in which you can safeguard yourself against potential theft or scrutiny.

You want to use Two-Factor Authentication so that you can securely log into your account by entering a code that is unique to you. Your code will automatically reset after 30 minutes, eliminating the possibility of anyone else gaining purchase to your account.

It’s always a good idea to keep an eye out for Bitcoin news. With Bitcoin exchanges shutting down after hacks, you have to be careful about where you invest in this electrifying digital currency.

Final Thoughts

The world of bitcoin is an uncertain one. There are many ups and downs. But, hopefully, this guide has shown you where and when you should buy bitcoin. Now is the time to get in on this exciting currency as it only continues to rise.

A word of caution: All trading involves risk. Only risk capital you’re prepared to lose. Past performance does not guarantee future results. This post is for educational purposes and should not be considered as investment advice. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Your capital is at risk.